Online ethnic fashion portal Craftsvilla is downsizing its operations, according to persons familiar with the development.

Online ethnic fashion portal Craftsvilla is downsizing its operations, according to persons familiar with the development. (Source: Reuters)

Online ethnic fashion portal Craftsvilla is downsizing its operations, according to persons familiar with the development. The company is understood to have let go of close to 100 people mainly from the merchandise and technology departments. Emails sent to Craftsvilla did not elicit a response. In FY16, Craftsvilla Handicrafts reported net sales of R37 crore and a loss of R119 crore. Another player in the fashion and lifestyle segment — Yepme — run by Vas Data Services has confirmed laying off 30 people.

Sandeep Sharma, co-founder of Yepme, told FE the firm has outsourced both warehousing and quality control to third-party agents. “Consequently, about 30 people involved in the operations have been asked to go,” Sharma explained.

Yepme typically sells fashion apparel and accessories under its own brand. In 2015-16, the company reported revenues of Rs 130 crore and a loss of Rs 96 crore. The management expects the business to be profitable at an operating level by April this year.

According to media reports, classifieds player Quikr, payments wallet FreeCharge and logistics player Vulcan have been pruning their operations, as a result of which employees have been asked to go.

Evaluating niche players like Craftsvilla, an industry expert pointed out that Craftsvilla had performed well on the supply side by introducing ethnic wear but was unable to create demand. “It lost out on the market share to larger horizontal players such as Flipkart and Amazon and that drove up the customer acquisition costs for the company substantially,” he said.